The accounting industry is one of the competitive industries in the world. This is because the accounting profession demands the utmost accuracy. With a huge workload in place, achieving 100% accuracy becomes even more challenging for CPA firms.
This is the reason new trends keep emerging with the passing of every year to streamline the accounting processes. So, what’s in store for 2020? Let’s dig deeper into the same.
Top 10 Trends in The Accounting Industry (2020 and Beyond)
1) Digital Revolution
Digitalization has revolutionized the whole world, and the accounting industry is no different. With ‘tax digitalization’ being made mandatory by governments all over the world, a change is seen significantly in business practices, and the way accountants communicate with their clients.
As per a Forrester report, clients stated they need mobile solutions by the accountants to resolve their financial issues since they spend most of the time on their Smartphones. This is the reason CPA firms are taking every possible step towards digitalizing client communication, with some of them even thinking of launching their own Apps.
2) Artificial Intelligence (AI)
As per The Sage Practice of Nov 2019 report, 66% of accountants are ready to invest in artificial intelligence, with 55% of the same likely to be using the same by 2024. The reason so many accountants are opting for AI is due to the fact it processes large data volumes at an extremely high speed, along with providing enhanced accuracy and productivity at a much lower cost at the same time.
This 24/7 available ‘virtual team member’ not only takes care of repetitive day-to-day and complex tasks but paves the way for informed decision-making. Going by the Practice of Now study, 58% of accountants are looking forward to automating various tasks with the help of AI, robotics, and machine learning in the coming 3 years.
3) Immediate Connections
In the digital age of 2020, CPA firms and clients will easily connect in real-time, leading to enhanced transparency and security. Transaction recording, which used to be a time-intensive task, can now be done within seconds, along with allowing access to everyone who wishes to see the validated changes.
Digital tools like mileage trackers help accountants engage clients in a much better way. For instance, using specific algorithms, a trip can be auto-detected by the tracker to ensure the accountant’s app tracks every financial transaction on the Smartphone of the client, avoiding any last-minute tax return hassle.
4) Automated Accounting Processes
Automation is refining the accounting industry as never before. With features like real-time reporting, monetary applications’ management, smart billing, auto-reconciliation, automation is being preferred by CPA firms more and more with the passing of every day. This is the reason; a report by ACCA has confirmed that over 50% of C-level professionals are expecting automated accounting development. Apart from this, decision-making becomes quicker since data is sorted and made available at a fast speed.
Top Accounting Automation Tools:
After you assess the potential of automation tools to benefit your accounting processes, the next step is to choose the right one as per your specific needs.
i) Intuit QuickBooks
Intuit’s QuickBooks is one of the most popular accounting software that helps meet accounting needs, from tracking income and taxes to tax reporting and tracking, creating estimates and invoices, etc.
This is an apt choice for solo business owners and freelancers for carrying out essential accounting tasks like invoicing, time tracking, reports, payments, and more.
Apart from carrying out the basic accounting tasks, Xero comes with 24/7 live chat support and is also a significant option when it comes to integrating. With over 600 integrations, managing payroll, inventory, invoicing, etc., becomes a cakewalk.
iv) Zoho Books
For small to medium-sized businesses, Zoho is pretty much the best choice. It comprises easily understandable graphs and dashboards for streamlining your accounting process, with the automated payment option adding to its glory.
If you are looking for a majority of basic accounting features like bookkeeping at literally no cost, Wave is the name for you. However, payroll services and payment processing which are integrated with the tools of bookkeeping are chargeable.
This is one of the best choices if one is looking to take care of the entire accounting back-office processes since it is the world’s leading ERP and accounting program.
According to the U.S. Accounting Today, the global accounting software market is estimated to reach 11.8 billion dollars by 2026.
5) Data Analytics
Now, accountants have to play a role greater than that of advisors. Now, they must have qualities that can influence the financial planning and decision-making of the business owners. These qualities come in the form of valuable financial insights that they provide to the owners through the help of data analytics.
With this, they are able to support strategies that not only lead to enhancing process efficiencies but the ability to manage financial risks. As per the Journal of Accountancy’s article, “The Next Frontier in Data Analytics,” CPAs are working on their skills to perform continuous auditing and monitoring, along with full data sets’ analysis to aid better financial planning.
6) Outsourcing Accounting Functions
Outsourcing CPA accounting services are revolutionizing the way CPA firms operate today. Most of the CPA firms look forward to outsourcing their repetitive and day-to-day tasks to outsourcing firms to save time and overhead costs. This allows them to focus on the core business activities for business growth and productivity.
The outsourcing industry incorporates the use of the latest technology to carry out its accounting operations and if we talk about the U.S. market, the following technological trends are creating the biggest impact:
- Robotic process automation.
- Bookkeeping work.
- Tax compliance.
- Management accounts.
- Cybersecurity and Safety.
Blockchain technology has benefited multiple industries. With respect to the accounting industry, it has already reduced the costs of maintaining ledgers and reconciling accounts. Also, assets’ history and ownership accuracy are guaranteed with the use of this technology.
This means accountants can have a clear view of their firms’ available resources and obligations. As per a report by Statista, projects that were blockchain-based witnessed an investment of almost $ 1 billion.
From the 3rd quarter, 2016 till the 4th quarter, 2019, the following represents the number of Blockchain wallet users worldwide.
8) Advisory Services
Advisory services are the next wave of financial solutions in the accounting industry. CPA firms and accountants look forward to providing strategies for growth and profitability. This has been made possible with the elimination of repetitive and manual tasks, paving the way for accountants to spend additional time on data analysis, providing intelligent financial insights and advice.
Leading U.S. Accounting Firms as of March 2020
9) Big data
As per a survey in 2016, 59% of professionals stated that analytics skills and data science would become necessary for the managers of finance and accounting by 2020. Big data supports firms by providing them with data platforms combined with expanding opportunities, with finance experts and accountants playing their parts in the background.
They identify which big data is of maximum use and turn the same into actionable insights for strategic decision-making. This means CPAs and accountants will be able to analyze favorable and unfavorable situations in advance through big data analytics and support the owners in preparing for the same.
From 2011-2017, Big Data Market Size Revenue Forecast Worldwide
10) Offshore Staffing and Remote Work Setting
It is always hard for employers to find the best talent for their team. This makes broadening the candidate hiring and search requirements. Now, employees have the option of dictating a few of their employment terms, which includes having a remote and flexible work setting.
The Associated Benefits:
- No potential client loss.
- Minimize fear against employees’ losing.
- Qualitative checks.
- Offer a little extra to your customers.
- Hire the offshore team as per your business cycle.
- Greater profitability without additional efforts.
- Best option to save overhead costs and deal with situations like coronavirus shutdowns.
Looking Forward (Conclusion)
This concludes the fact that a lot of trends are going to reshape and refine the accounting industry like never before in the future.
As per the 2019 Practice of Now report, almost 85% of accountants said an adoption pace is needed in their country to leverage technology in the accounting operations. Apart from this, multiple reasons were given by the CPA firms when asked what’s making them lag behind in terms of technology adoption.
This included a lack of funding and time (38% and13%), lack of expertise (25%), confusion, and more. As far as incorporating the use of technology into every CPA firm is concerned, it will take some time. However, going by the pace it is being accepted at, that day is not far away.accountingtoday.com